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Tuesday, February 20, 2007

Today’s business news is led by the discussion of a merger between XM and Sirius satellite radio. Now, I know most of the media-consuming universe couldn’t care less about this possibility, but I’m highly interested in this because I am an original subscriber to satellite radio, and I would sorely miss it if it ended up kaput. While I am usually skeptical of “monopoly” situations, I am also aware of the issues that are hampering the growth of both XM and Sirius.

I hear the usual arguments amongst business types: higher pricing, less choice, etc. And these are generally valid arguments. However, the primary reason I have satellite radio in the first place is sports programming, and I actually am faced each year with the possibility that [fill in the blank sport] will defect from one provider to the other. A consolidation of services would eliminate that possibility. This means, for example, that I would not be forced to carry an XM subscription for Major League baseball, and a Sirius subscription for the NFL. Right now, I have to do that if I want both. This merger means I wouldn’t. And in that sense, the merger is good news for the consumer.

So is it going to happen? Who knows? There are always exceptions to the rules of monopolies. XM and Sirius are competing with myriad media choices, many of which are available at little or no cost to the consumer. In such a climate, it is obvious that XM and Sirius will struggle going forward to make any profit at all. I think those conditions make it imperative that a merger be allowed to move forward. Or else, sports fans like me can begin to kiss our broadcast options good bye.

.: posted by Dave 10:19 AM

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